How much of Chinese exports is really made in China?
Subtitle: assessing domestic value-added when processing trade is pervasive
By: Robert Koopman, Zhi Wang, Shang-Jin Wei.
Contributors: Wang, Zhi.; Wei, Shang-Jin.; National Bureau of Economic Research.
Series: NBER working paper series -- working paper 14109; Working paper series (National Bureau of Economic Research : Online) -- working paper no. 14109.
Publisher: National Bureau of Economic Research
Published: 2008
Place of publication: Cambridge, MA
Language: eng
Format: Electronic resource
Description: "As China's export juggernaut employs many imported inputs, there are many policy questions for which it is crucial to know the extent of domestic and foreign value added in its exports.  The best known approach - the concept of "vertical specialization" proposed by Hummels, Ishii and Yi (2001) - is not appropriate for countries that engage actively in tariff/tax-favored processing exports such as China, Mexico, and Vietnam.  We develop a general formula for computing domestic and foreign contents when processing exports are pervasive.  Because this new formula requires some input-output coefficients not typically available from a conventional input-output table, we propose a mathematical programming procedure to estimate these coefficients by combining information from detailed trade statistics with input-output tables.  By our estimation, the share of foreign content in China's exports is at about 50%, almost twice the estimate given by the HIY formula.  There are also interesting variations across sectors and firm ownership.  Those sectors that are likely labeled as relatively sophisticated such as electronic devices have particularly high foreign content (about 80%).  Foreign-invested firms also tend to have higher foreign content in their exports than do domestic firms"--National Bureau of Economic Research web site.
Notes: Title from PDF file as viewed on 7/18/2008.

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